The gorilla in a developing country

 

Many at times people tend to fault the government on its many decisions due to propaganda rather than appreciating its genuineness to create as much as possible an equitable advantage to the entire populace.

Who knows, most decisions may be for the good of the country after all, which is always the case anyways.

Recently, the National Communication Authority (NCA) announced that the “Government, through the Ministry of Communications, has directed the NCA to enforce the provision of the Electronic Communications (EC) Act 2008 and the National Telecommunications Policy to address glaring disparities in market share and revenue share in the sector.”

MTN is classified the Gorilla in our developing country, Ghana, because it appears to be running away with the “telco crown”. They have the largest share of subscribers for both voice and data, as well as the largest number of Mobile Money users and such an instance in a business plan does not depict “free market” from a think tank perspective and the opportunity MTN has poses a threat. Thus, the decision of the government to reverse this disparity index.

This unanticipated decision to break telecom monopoly cannot be a deterrent to SCANCOM (MTN). Rather, the government basically seeks to ensure a proper and healthy competition among telecommunications players, secure a much better pricing policy for the consumers and facilitate a sound regulatory regime.

Kandifo Institute highly commends government for this decision to implement its already existing Regulatory Policy to Industry players to prevent a mere monopoly of the mobile network operator (MNO). We also commend the government in respect of the channels, telecom and development phase and the decision for declaring MTN Significant Market Power (SMP) and how this positions the other mobile network operators for a fair playfield.

If we care to know, Ghana holds just about 5% shares in MTN which can rightly be measured as peanuts and as a state, we must rectify this. Many other telecom networks would continue to perform greatly low and with time, MTN would eventually take over all the others in the sense that:

1. It would get to a time where Ghana would lose her power to MTN dictating to the state.
2. This would negatively impact competition and would not allow free market therefore, rates or charges should be the same across all networks.
3. It does not give the consumer the choice to decide which network to subscribe to, more or less consumers are forced to stick to one (MNO).
4. It does not enable any investor interested in Telecom Networks to come into the country since there is no room for competition.

From the above, Kandifo Institute as a Libertarian, Conservative, Free Market Think Tank supports the decision by the government.

Many would ask, why give MTN a higher share before bringing out this regulation?

The normal Ghanaian who feels this could have been implemented a long time ago would want to know why Regulators are targeting MTN now. Truth is, the decision is not a punishment but rather, government acknowledges the investments MTN has made in their operations over the years and noted that their investments have enhanced their operations, however, its growing dominance has impacted negatively on competition and consumer choice, necessitating corrective action.

Government seeks to create an opportunity where All (Consumers) could be able to have a freedom of choice in terms of network usage. This depicts the Individual Liberty we (Kandifo Institute) stand for as a think tank.

When this is implemented;

1. It will ensure a healthy competition between the telecom networks and good pricing for all consumers.

SCANCOM (MTN) has 75% and from a free-market perspective, it is not equitable (obviously unfair for MTN to have that much share). After all the MNO has had many backlashes overtime.

MTN Ghana gave its goodwill package to its data subscribers as compensation for the recent disruption in services due to the supposed cuts to the undersea cable delivering the service (double undersea fibre optic cable cut in Europe). The situation believed to have affected all operators and customers in West Africa region due to cut on the West Africa Cable System (WACS) however many believe it was a strategic stunt.

Also, a subscriber of MTN Ghana, Martin accused MTN Ghana of capping the speed of their network after they compensated customers with data over the 3 days network disruption.

He alleged that MTN after giving subscribers 2 GB data capped the network speed to 25 kbps to prevent people from using the supposed dashed data. Narrating that as soon as he topped up, his speed rose to 370kbps and urged NCA to put some measures in place with regards to his concerns.

The above accusations have huge repercussions if not checked since both scenarios affected two-thirds of consumers.

The advantage to identifying or defining telecommunications market is that it aides in identifying operators with significant market power in particular market segments.

It is therefore reasonable to designate MTN as an SMP in at least the following areas:

1. Minutes
2. Mobile Data services
3. Wholesale Data Services
4. FinTech VAS Services

The implementation of this policy initiative is to correct the imbalance between these telecommunications market. The latest reports received from the industry shows a worrying trend which demands immediate action to correct the growing market imbalance and creation of a near monopoly in the telecoms sector. This imbalance exposes the country to the dictates of the dominant operator, militates against effective competition and impacts negatively upon investment in the sector. The impact of what government wants to do is good for the consumer

From a think tank perspective, the statistics shown below is not equitable enough because MTN still dominates in the average Voice Subscriber Market Share for the various operators for 1st quarter 2020.

Average Data Subscriber Market Share for the various operators for 1st quarter 2020 is in a range of:

The revenue market share figures show MTN having almost 75% of all industry revenues and over 90% of mobile financial services revenue.

It is evident that the above statistics clearly create an uncompetitive and unprofitable environment for other industry players and is not free-market enough from a think tank perspective and so Kandifo Institute is in support of the fact that government wants to create room for competition.